Despite 2005 losses, Magna `encouraged'

Horse racing

March 01, 2006|By SANDRA MCKEE

Tom Hodgson, president and chief executive officer of Magna Entertainment Corp., the owner of Maryland's two major thoroughbred racetracks, described 2005 "as a financially challenging, yet exciting year" while revealing fourth-quarter and year-ending financial losses.

MEC's fourth-quarter revenues dipped 4 percent, from $132 million in 2004 to $127 million in the three months that ended in December 2005. Year-ending numbers showed the company's revenues declined 11 percent overall, from $702.5 million in 2004 to $624.7 million in 2005.

But Hodgson said he is "encouraged by the fact that the third and fourth quarters of 2005, typically our least profitable quarters, given the seasonality of our business, have delivered ... net-loss improvements from continuing operations over the comparative periods in 2004."

Executive vice president Blake Hanna pointed out that operations losses have continued - $29.4 million in 2005, compared with $44.3 million in 2004.

MEC also announced its board of directors has approved the formation of PariMax, Inc, a company to oversee the development of electronic distribution platforms. Maryland Jockey Club chief executive officer Joe DeFrancis has been named the CEO of PariMax.

In a conference call yesterday, Hodgson again said that while MEC will continue to try to find buyers for its golf properties and some of its racing facilities, the Maryland Jockey Club remains one of the company's marquee properties and is not on the market.

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